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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> M25 Group Ltd. v Tudor & Ors [2003] EWCA Civ 1760 (04 December 2003) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2003/1760.html Cite as: [2004] 2 All ER 80, [2004] 1 WLR 2319, [2003] EWCA Civ 1760, [2004] WLR 2319 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
(HH JUDGE COOKE)
Strand, London, WC2A 2LL |
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B e f o r e :
and
LORD JUSTICE CARNWATH
____________________
M25 GROUP LIMITED |
Appellant |
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- and - |
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JOHN JAMES TUDOR AND OTHERS |
Respondent |
____________________
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Jonathan Gaunt QC (instructed by Rochman Landau) for the Respondent
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Crown Copyright ©
Lord Justice Carnwath :
Introduction
The Scheme
"11A Right to information as to terms of disposal &c
(1) The requisite majority of qualifying tenants of the constituent flats may serve a notice on the purchaser requiring him –
a. To give particulars of the terms on which the original disposal was made (including the deposit and consideration required) and the date on which it was made, and
b. Where the disposal consisted of entering into a contract, to provide a copy of the contract.
(2) The notice must specify the name and address of the person to whom (on behalf of the tenants) the particulars are to be given, or the copy of the contract provided
(3) ….
(4) A person served with a notice under this section shall comply with it within the period of one month beginning with the date on which it is served on him
54 Notices
(1) Any notice required or authorised to be served under this Act-
(a) shall be in writing; and
(b) may be sent by post
(2) Any notice purporting to be a notice served under any provision of Part I or III by the requisite majority of any qualifying tenants (as defined for the purposes of that provision) shall specify the names of all of the persons by whom it is served and the addresses of the flats of which they are qualifying tenants.
Factual background
"We act for John James Tudor, Ruth Watts Davies, Richard Earlam, Edith Dorothy Stock and Canara Limited, who are the qualifying tenants in respect of Brambridge House, Brambridge Park, Bishopstoke, Hampshire."
There is no dispute that all those named were qualifying tenants, and that accordingly the first part of section 54 (2) was satisfied. However the notice failed to state "the addresses of the flats of which they are qualifying tenants", as required by that subsection. It is also common ground that, if the section 11A notice was not valid, then the time for exercising the tenants' rights under section 12 has expired, and those rights are effectively lost. It is in these circumstances that the defendants applied to strike out the claim.
"It is clear from the claimants' evidence that prior to the acquisition by the defendant the previous landlords' solicitors were made aware of the addresses of all the relevant tenants and that subsequent to the questioned notice, 23rd July 2002, the tenants' solicitors wrote to the (new) landlords' solicitors setting out the relevant flat numbers."(transcript, p 3B)
He also referred to a schedule of qualifying leases, said to have emanated from the vendor landlords, apparently dating from about January 2001, which relates the names to the relevant flat numbers. It is uncertain on the evidence whether that was known to the purchasers. The Judge noted that Mr Gaunt QC, for the tenants, had "trailed his coat a little" by saying that he took it to be agreed that the landlords knew of the schedule of lettings, and had elicited no reply from Mr Radevsky for the purchaser. The Judge said:-
"It seems to me that if this is a relevant consideration then (1) it is highly probable as a matter of ordinary common sense that the landlord would know what the lettings were, and (2) if the landlords are saying they did not know that would be a triable issue on the facts and not open before me on this application." (p 17E)
The judgment below
"The remarkable result would be that there would instantly spring into being at the moment of its service two statutory contracts, both binding on the parties and each differing in important respects from the other." (p267).
"All these authorities are completely consistent. If you are seeking to see whether a notice complies with the statutory requirement you construe the statute and apply it to the notice. You do not ask the question 'what would a reasonable recipient think'. On those authorities, and if those were the only line of authorities, that notice plainly does not comply. The addresses are not there in any shape or form." (p 8 – 9).
"The machinery of the enforcement provisions and the appeal therefrom simply would not work unless there were some fixed time put in section 16 (1) to limit the time in which an appeal is to be brought. That provision is therefore imperative or mandatory and a failure to appeal within the time there limited clearly goes to the jurisdiction. The provisions of subsection (2) requiring the notice to indicate the grounds of appeal and to state the facts on which it is based appear to me to be more in the nature of procedural matters which are directory and do not go to the jurisdiction." (p 243 E-F).
"By way of final comment I would add that I am strongly attracted to the view that legislation of the present kind should be evaluated and construed on an analytical basis. It should be considered which of the provisions are substantive and which are secondary, that is, simply part of the machinery of the legislation. Further, the provisions which fall into the latter category should be examined to assess whether they are essential parts of the mechanics or merely supportive of the other provisions so that they need not be insisted on regardless of the circumstances. In other words, as in the construction of contractual and similar documents, the status and effect of the provision has to be assessed having regard to the scheme of the legislation as a whole and the role of that provision in that scheme - for example, whether some provision confers an option properly so called, whether some provision is equivalent to a condition precedent, whether some requirement can be fulfilled in some other way or waived. Such an approach when applied to legislation such as the present would assist to enable the substantive rights to be given effect to and would help to avoid absurdities or unjustified lacunae." ([1997] QB at p886E-G).
"A purchase notice must give adequate notice to the new landlord of the qualifying tenants' desire to purchase the estate or interest that they should have been offered by the original landlord. That is imperative, in the sense that it must be followed to the letter, but some of the other requirements of section 12 are only directory." (p 1600B).
On the other hand, the requirement in section 12(3)(a) that the notice should require disposal "only" of the premises within Part I was "directory". He said:-
"In this case, the purchase notice included extra property, but that did not invalidate the notice as a whole…. The landlord was given adequate notice that the tenants of buildings 1 and 4 of Tudor Court and Tudor House wished to acquire the freehold interest in them. That was in my view sufficient." (p 1602B-C)
"I cannot regard this defect in the tenants' purchase notice as so significant as to render it altogether invalid, for three reasons. In the first place, it was in all probability caused by the original landlord's failure to serve a notice under section 5 and in doing so to sever the transaction as required by subsection (5) of that section. Secondly, it must have been perfectly obvious to the new landlord which parts of Tudor Court could, and which could not, qualify under Part I of the Act. And thirdly, the purchase notice allowed as an alternative that the terms might be determined by a rent assessment committee, which would have jurisdiction under section 13(1)(a) to determine 'the identity of the property to be disposed of'. I would therefore conclude that the purchasers' notice did not comply with section 12 in any respect that was imperative or mandatory but at most where it was directory …". (p 1604 C-E).
The other member of the Court (Sir John May) agreed with both judgments.
"One ought to remember that these sort of statutory provisions are aimed at providing a commercially fair result so that recipients of notices are told what they have to be told but that the object of the exercise is the giving of information and the defining of issues, not prescription of steps in a ritual dance or a complex game, one false step in which is intended to produce disaster." (p 15B-C).
"(a) as regards the givers, the tenants, to seek information as to the transactions; (b) as regards the recipient landlord to tell him who seeks the information and whether the seeker of the information equals a majority of the qualifying tenants and is therefore entitled to it at all." (p 16C-D).
He accepted Mr Gaunt's submission that in relation to the second purpose, the notice is at best of only limited assistance to the landlord in deciding whether or not he is obliged to give the information. The landlord needs to know, not merely the identities of the qualifying tenants and which flats they occupy, but how they relate to the total number of flats and the total number of qualifying tenants, in order to see whether those serving the notice are "the requisite majority". The Judge concluded that the "irreducible minimum" of matters that must be regarded as mandatory are "matters which but for the notice the landlords could never know". He gave as examples:-
"Who is giving the notice, what their proposals are, whether they accept the other party's proposals, what property they seek to acquire, are all things the recipients of a notice must be entitled to receive 'en clair' and not have to guess at.
By contrast it seems to me that where the information which the notice contains achieves the purposes of the notice then the further statements which the statute requires but which once given the mandatory facts are common ground or readily and indisputably ascertainable are likely to be regarded as directory only. It will be helpful to have them but the purpose of the notice is achieved without them." (p 17E – 18A ).
He regarded the Kay Green decision as strongly influenced by the fact that the recipient of the notice would have "uncontroversially known the true position as to the relevant facts". He continued:
"Whether or not one accepts that the schedule was definitely known to the present landlords, what is clear is that…. a landlord receiving a notice would have had in any case to relate it to the underlying tenancies which were on the facts uncontroversial and something the landlords would either have known or could easily have discovered. Once the identity of the notice givers was known it could by relating the notice to the uncontroversial facts (some of which should have been contained in the notice but others of which would not have been) have answered the question 'Are these people entitled to information?'" (p 18 C-F).
Submissions in this Court
Conclusion
Lord Justice Potter